Tag Archives: balanced scorecard

It’s Time for Strategic Business Process Management

I am coming off several weeks’ having to reassure clients that they are doing well and that – so long as they stick to their knitting – they’ll be ok a year from now. I have others who have required some serious, adult discussions. They lack a cohesive strategic plan, therefore, they lack in the areas of discipline, direction, commitment and – frankly – workflow IQ. They struggle with change, flexibility and orientation (“where are we?!”)

The disconnect is rampant. Perhaps it’s in the name. Shall we refer to business process management (BPM) as Strategic Process Management (SPM) from now on? You heard it here first, folks.

Strategy+Goals+Objectives+Metrics

I’ve heard others call it Business Motivation Modeling and agree that we need a deeper understanding of critical business drivers. This field and the broader business interests and stakeholders it serves needs to reminded constantly of the “means”, the “ends”, and the “influences”.  By keeping a strict focus on strategic goals (building the business, becoming #1, being fastest, cleanest, safest, whatever) and tactical objectives, business analysts and process engineers ought to be able to produce the outcome they’re looking for and they ought to be measure whether they’ve achieved their goals or not.

Environmental Analysis

However, failing to manage strategy and failing to carefully and comprehensively assess what is happening economically, politically, socially, technologically, competitively and legislatively will absolutely result in painful surprises. I have seen people very proud to have hit sadly meaningless targets lately.

Strategic and Technical Advisory Groups (STAGs)

I am calling for the formation of STAGs in every organization with 25+ employees. This committee will review and evaluate business process and other organizational change from both a technical standpoint and a strategic standpoint. Strict adherence to strategy (bearing in mind that strategy – not values – can and ought to change to reflect the environment) will be their direct responsibility. There will be an executive on each STAG until and unless every organization recruits a Chief Process Officer. Perhaps then, the brilliance of BPM will have been fully activated.

Business Process Data: On Dashboards and Windshields

Reading about IBM’s “Stream Computing” in Business Week magazine this week, I am reminded of a time in a meeting several years ago when I groaned: “I don’t want a better dashboard; I want a cleaner windshield. I want to know what’s coming and a dashboard can’t tell me that. Those are lagging indicators.  At best, a dashboard tells me what I have done in the recent past. I want to know what my suppliers and customers are doing as they approach…before they get here.”

On My Windshield

I never did get my Windshield. Today, we’re lucky if we have a dashboard. It would  put many of us in a small minority if we could have near-real-time indicators of what just happened  on our desk-tops. From a business process management perspective, how would life be if I could see changes in my supply chain before they affect me? If I could see my suppliers’ dashboards, would that be enough to give me an idea of what I could expect?  If, instead of relying on marketing, I relied on interoperable business data between my company and my customers, could I see their demand before they pick up the phone and place an order? That information would help me in innumerable ways.I suspect very large companies can afford supply-chain and distribution information management and reporting but what is a mid and small sized organization to do?

Is it possible that my contracts with suppliers and customers might involve strategic dashboard exchange? Of course  it is. In a business-to-business relationship, my clients might even think they were doing business with a pretty smart guy if they knew I needed to know something about their data prior to them needing to know they need me. I bet they would be happy to give me that information in small packets called “Bugs”. Throughout the day, “bugs” would hit my “windshield” and I would know what’s coming down the road. You could have a lot of fun with this metaphor. Landscape, traffic signs, intersections, accidents, traffic jams, you name it.

Operations, Finance, Marketing and Sales: Performance Metrics During the Race

Dashboards are helpful. Don’t get me wrong. I find them especially helpful once I have arrived. I can quickly look back over the course of the trip (or the day at work) and understand where I have been, what my top speed was, how many miles I covered and how much fuel I used (plug your favorite business metrics in here). A windshield, however, lets me calibrate  what is happening in the midst of a high-speed race. As a former football player, I can tell you that my stats after the game were a lot less important to me than was knowing where the line-backer was when I pulled out on a sweep. Failure to see my adversary or my teammates often caused me great pain. Successfully anticipating blows led to touchdowns.

The Importance of Anticipation: Getting Out of the Blind Spot

We are living through the negative consequences of not anticipating what lies ahead. We’ve all become so enamored with the rear-view mirror and the mounted DVD players in our SUVs that we have forgotten to simply out the window in front of us and drive defensively.

This may all seem trite and I may sound like I am beating this metaphor to death but I think we need simple reminders these days. Look outside your vehicle and assess what is happening down the road. Many companies have done this very well and managed to keep staffing levels and inventory at quite safe levels. Other companies were so busy fiddling with their dashboards and cell phones and doing their make-up while they drove that they missed their exit and went over a cliff.

What do you need to know about the road ahead and the drivers around you? What kinds of “bugs” do you want hitting your “windshield”? This is a great question for your next executive team meeting. It’s also a great question for your business analysts and your line staff.

  • what would you need to know about your customers’ “demand behavior” that would allow you to do your job better?
  • what would you need to know about your suppliers and supplies?
  • what would you need to know about the economy?
  • political changes around the state, country, world?
  • currency and credit changes?
  • social trends and patterns?
  • legal developments?

Keep in mind that as you’re driving in LA, for example, you don’t want to know what’s happening on the roads in Brussels. Keep your expectations “close” to you. There is little true and accurate value in looking “down the road” for more than 30-60 days at a time. Conditions on the roads are changing far too quickly. Pay attention to the drivers next to you where it matters most. The next bend in the road is far more important than the bridge several hundred miles away.

Give your data needs some attention, ask your suppliers and customers for data and use it effectively. Good data makes good information. Reliable information becomes intelligence and enough intelligence used appropriately over time makes one wise.

Time For Serious Strategic Planning, Widening Process Improvement & Balanced Scorecard

If there was ever a time to call your executive and leadership teams together for some mission-critical thinking, this is that time. I am slightly biased toward making those process-oriented meetings but that’s besides the point. The market – globally, nationally, locally as well as from a unique, individual consumer standpoint – is taking a beating. A mugging really. The capital we thought we had to conduct business with is not there the way we thought it was months ago when all we feared was a recession. With recession eclipsed by fears of a deeper, longer meltdown, it’s time to think and talk about survival of the fittest.

Who’s Fittest?

How is fitness defined in your industry? We know stock price alone isn’t the answer. If that were the case, nobody would be considered fit today. Is it profitability? Productivity? Innovation? Customer satisfaction? How is the strongest competitor in your field or in your market deemed the strongest? How long can they sustain in a down economy?

You must be able to define fitness and bear in mind that definition will vary from one industry to another. What makes a great hospital does not make a great publication or a great restaurant or a great garment factory.

There is an argument to be made for reading Colins’ Built to Last before the end of the month. Preserve the core and change the tactics and process as it is called for in order to adapt to this new environment.

Build On Core Competencies & Core Processes That Work

Want to widen your process-orientation? Want to document, design and implement more efficiency, productivity and innovation? Start by pinning down and understanding what you do best. Start by identifying what your core competencies are and deeply understanding what makes them so. Take an inventory of what it is you do best and how it is that came to pass. Do not change a thing in these areas right now if you can help it – except to do more if you can.

Is there some aspect of your core competencies that can be expanded to other areas of your work, product-line or service? Can you become the outsource provider of these services to another firm? To a competitor? Can you market and promote your core competencies in new ways? Can you take them into new markets and embed what you do in an entirely new supply-chain? The point is to identify what you have 100% confidence in and do as much of it as possible during tough times. This is your greatest survival tactic. Don’t under-estimate your need to survive right now. Read Zook’s Profit from the Core before the end of the month while you’re at it.

Balancing Your Scorecard

As I mentioned earlier in this post, you must begin identifying your most meaningful performance metrics. Collectively, we do an abysmal job of this. We rely too much on financial measures or quality measures or employee satisfaction measures or none at all. Too often, we measure one dimension of our business at the exclusion of others. If you haven’t already done so, pick up Niven’s Balanced Scorecard. The implementation of a balanced set of metrics can be relatively straightforward and will do wonders for you if you can stick to it.

Do yourself and your organization a favor this week and make a commitment to measuring at least one  from each of the four dimensions of: customer satisfaction; financial performance; internal process improvement; and employee growth. If you make this commitment today while times are tough and while your employees are looking to your for leadership, then you will instill in them an abiding belief in your ability to see and appreciate the big picture. You will also be setting in motion the machinery that will set you far apart – so far as to be in a different league  – from your competitors when the dust of this economy settles. You will thrive.

Do These Things

Leverage your process improvements, your new skills and your deep desire to outlast the bad news of late. Bring your people together. Have frank and hard-working sessions together. Plan like professionals. Work more and work smarter. Apply your process-orientation as widely as possible and make a commitment to measuring what matters. Then what matters will get done in some surprising ways and you’ll be glad you made these commitments 1, 2 and 3 years from now – long after your competition has thrown in the towel.

Make The Tough Decisions

As you plan, apply yourselves to the core of your business, and begin measuring your performance in new ways, I assure you that weaknesses will become apparent. You will certainly be faced with difficult decisions to make. Resist the impulse of simply making deep cuts. If you manage to discover you have resources at your disposal, think of them as an investment before you think of them as a savings. This may, in fact, be the best time in your industry to provide exceptional customer service or it may be best to expand into a new market. The very people you may have otherwise shed may be the best people to take you in a new direction. Lead outside the box. If you do have people to let go of and you cannot justify any other conclusion, make the decision, be compassionate about it and help everyone through the transition. By all means, keep your high performers who “get” your vision and mission.

Workflow & BPM Align with Balanced Scorecard

A process-driven organization – one that undertakes to create efficiencies and improvements in how it does business – is well-positioned to explore adoption of a Balanced Scorecard. As a matter of fact, if your shop is toying with the idea of adopting the Balanced Scorecard and you aren’t also employing Workflow and Business Process Management (analysis and improvement) then you’re wasting a valuable opportunity.

Balanced Scorecard Measures

The Balanced Scorecard measures operational efficiencies so it’s a bit of a no-brainer. If you haven’t already done some reading on the topic, you ought to. The two approaches are rather symbiotic. The Balanced Scorecard also looks to customer measures of satisfaction with such things as quality of experience and product, financial measures like cost of doing business and growth measures (new clients, etc.) I guess I would recommend both simultaneously because, after all, when you measure change, you have to have a change methodology and when you have change methodology you want to have measures to demonstrate your effectiveness.

Training

Having been through both approaches (BPM and Balanced Scorecard) I recommend that you and others in the organization get some professional training. The Balanced Scorecard, especially, is too strategic and measures too many variables for the average business analyst. It reaches far beyond but encompasses typical BPM and workflow improvement activities.

Opportunity

Take advantage of the status – frankly – that Balanced Scorecard offers the workflow and BPM team. It’s a quick way to promote what you’re doing at the executive level where the drive and leadership exist. By embracing it yourselves, you’ll impress your superiors and ultimately find that the budget for what you’re after will be richer by virtue of the your strategic importance.

Strategy is King

Having said that, be mindful that your project will need to meet Balanced Scorecard imperatives for strategic importance!